Wealth Matters: Keep things simple — it’s a genuine gift

Our columnist answers your questions on how to protect and increase your net worth, including helping a son with a house deposit

Are my husband and I walking into any tax traps with a planned £40,000
loan to our son for a house deposit?

The capital is to be repaid at £100 a month via bank transfer, as proof of
repayment for HM Revenue & Customs (HMRC). We will all sign a private
letter of agreement, so there is no need for solicitors.

As our only child, he will inherit all our estates, including the debt, so
he will end up owing the money to himself.

Our joint assets, including our house, are worth well under the £650,000
inheritance tax (IHT) threshold. The loan will come out of cash Isas we have
built up over the years, and will not, therefore, affect our standard of
living.

Several years ago, we paid off his £12,000 student loan. The HMRC helpline
said then that an informal interest-free loan was legal provided he made
regular